(Marjolein Dilven/Wealth of Geeks) – The Accommodation and Food Services industry is experiencing the highest quit rate since July 2021, above 4.9 percent for most of the year. Retaiol workers are quitting almost as frequently, with resignation rates hovering around 2.6 percent in September 2023.
The American labor market has experienced a rollercoaster over the past decade. At the pandemic’s peak, millions lost their jobs, and the unemployment rate soared. But many businesses now grapple with a worker shortage, causing service delays and disruptions in various industries.
They call it “The Great Hiring Challenge.”
“The Great Resignation”
One notable aspect of this challenge is the fallout of what some experts dubbed, “The Great Resignation.” During this period following the initial pandemic wave, workers left their jobs to pursue better opportunities, improve work-life balance, and earn higher wages. The Bureau of Labor Statistics (BLS) data indicates this trend is gradually slowing, but its effects still linger.
A vital indicator of the labor market’s health is the labor force participation rate, which measures the percentage of the working-age population that is either employed or actively seeking employment. Despite some signs of recovery, the labor force participation rate remains below pre-pandemic levels.
Which States Face The Greatest Hiring Challenges?
WalletHub conducted an extensive analysis of all 50 states and the District of Columbia to understand where employers struggle to hire workers the most. The study considered the rate of job openings for the latest month and the last 12 months, providing a comprehensive overview of the hiring landscape. The findings shed light on the states facing the most significant hiring challenges.
Among the states experiencing the most hiring difficulties, Alaska stands out with a job openings rate of 7.9%. West Virginia and Louisiana follow close behind, both reporting a job openings rate of 7.4%. Meanwhile, Georgia has a job opening rate of 7%, and South Carolina reports 7.1%. These states consistently demonstrate a higher demand for workers compared to the available labor pool statistics.
Why Do Employers Struggle To Fill Job Positions?
Business publication Athens CEO reported on the WalletHub survey results. Francesco G. Duina, Professor of Sociology and Social Sciences Division Chair at Bates College, says, “There is simply a shortage of qualified labor or people willing to work for the wages offered. The rise of the gig economy has also created significant flexibility in the labor market, so workers feel less tied down to any one job. In addition, and relatedly, the pandemic has prompted people to reevaluate their priorities, with work sometimes taking less of a central place in their lives.”
Kate Bezrukova, Ph.D., Associate Professor and Chair of Organization and Human Resources, School of Management at the University at Buffalo, added, “We know many people in the workforce are underemployed; they have jobs with little or no benefits that do not provide a living wage in the area they live (e.g., The Bay Area of California).”
Bezrukova’s trend is also reflected in the 2023 Economic Well-Being of US Households report released by the Federal Reserve, which states that 82% of adults expect to be fully able to pay their bills, down 4% from 2021.
How Can Employers Attract and Retain Employees During This Troubling Period?
Nancy DiTomaso, Distinguished Professor at Rutgers Business School, points out that employers should offer “higher pay, better benefits, more stability of employment, and greater flexibility.” Meaningful, fairly compensated, and non-exploitative jobs are key for retaining a motivated workforce.
Steven Glazer, professor of Economics and Department Chair of Social/Behavioral Science at Norwalk Community College, says, “A recent survey showed that the top priority of many employers is employee retention, which they view as more critical than revenue generation. In any situation, incentives are key in attracting and retaining employees. These can be financial in nature, flexible work schedules, or even the opportunity to work remotely when possible.
States With Less Severe Hiring Challenges
In contrast, there are states with less severe hiring challenges, indicating a greater ability to meet their businesses’ workforce demands. These states have reported lower job openings rates in the latest month.
Washington and New York both report job opening rates of 4.50%, while New Jersey boasts a rate of 4.90%. Hawaii and Indiana both report 5.00%. These figures suggest that employers in these states do not need more immediate help hiring new workers. However, the job market conditions remain volatile and unpredictable.
Deciphering Labor Market Challenges and Solutions
The challenges employers face in the current labor market are multifaceted and complex. As the United States navigates the post-pandemic landscape, businesses face difficulties in hiring and retaining workers. Some states are experiencing more acute hiring challenges than others.
Understanding the root causes of these challenges is essential for finding sustainable solutions. Employers can better attract and retain talent during these turbulent times with competitive compensation, flexible work arrangements, and a focus on improving workplace conditions.
The future of the labor market remains uncertain, and its trajectory will depend on a number of factors. However, with continued adaptation and innovation, employers and workers can navigate these challenges and work towards a more balanced and resilient labor market in the coming years.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
